8I Holdings Limited (ASX:8IH)

[Wildreamz]

Is the market actually undervaluing 8i now?

Based on its financial report ending 31st March, it has NTA of 8.6cts, majority are cash and "investible securities" - But share price was actually 6.2cts (adjusted from 6.5 cts aus) at year closing on the same date. This is almost a 40% discount. This means that Mr Market is actually assigning a negative value to its education and ecosystem business? Mind u, this is a business that cant be replicated easily from scratch n all the business connections n relationships etc..

Assuming the securities are easily liqidated and insiders shd know intimately, wouldnt it be a hidden champion?

Are they frantically buying back their shares at current value?

[jaco]

This means that Mr Market is actually assigning a negative value to its education and ecosystem business?

Yes, I think your observation is correct. The assets on the balance sheet are fairly liquid for the largest part. One could liquidate the assets, terminate all education and other business operations and distribute the net proceeds to the shareholders with a final dividend.

But that is theory. In practice, there is no indication that the board is considering this course of action. On the contrary, they are excited about the prospects of their app Wealthpark and the growth of their activities in Malaysia and other countries.

[sillyivan]

Read through their annual report. It looks like their fund is separated into 2 portions, old and new holdings. The old holdings have massive losses and is very illiquid. So i would think if they were to try to liquidate it, the losses will be even larger. New holdings are doing okay and fairly liquid. You should discount the NTA of 8.6cents further based on your best gauge.

[mslee888]

Assuming the securities are easily liqidated and insiders shd know intimately, wouldnt it be a hidden champion?

Their legacy holdings are illiquid, difficult to exit without realizing huge losses....very hidden champion indeed...Guess mr market already priced it in.

[weijian]

Assuming the securities are easily liqidated and insiders shd know intimately, wouldnt it be a hidden champion?

Their legacy holdings are illiquid, difficult to exit without realizing huge losses....very hidden champion indeed...Guess mr market already priced it in.

hi mslee88,
i read that in the AR as well. But without an idea what they are, it wouldnt be easy to extend the back of envelope calculation.

@wildreamz, Based on ar19, they did buy back close to 0.3% of their shares at avg cost of ~12cents in that year. Didnt see any more buybacks since then and i thought they should be doing so! (at least based on what they preach)

@jaco, i thought if i were them, i would just simply privatise and enjoy the gains myself!

[karlmarx]

Companies with corporate governance issues -- whether real or perceived -- are usually priced as bargains in the market. Kimly is a good example.

Low share price relates to investors' fear. There are many things to be fearful of when investing in companies riddled with CG issues. Least of which are the valuation of items on the balance sheet.

Even if no attempt is made to massage the numbers on financial statements, a questionable operator could make IPT 'expenses' -- and of course not declare them -- which allows earnings to flow out of the company.

My personal rule is not to invest in companies with 'questionable operators.'

[Baldric]

8i operation explained that
 The real danger for course students is not losing a 1 time couple of thousands on instructors.

But the later move where the student place their faith and life long saving money into an instructor is always ready to pump up their garbage and dump it to their hidden champion fund.

And the student pick up the garbage like a gem.

So goes the share from $1 to $0.06.
95% wipe out for student who practice value investing.

[Bosco]

A lot of people lost money in the IPO deals offered up by 8IH. And these are people who paid thousands of dollars in membership fee to be part of the inner circle. Will advise anyone that’s considering paying for their course to really think about it. Their focus is not education. That’s just a stepping stone for them to up-sell junk businesses and IPOs to you.


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[karlmarx]

There are a number of people trying to monetise their investment knowledge/ability. Those with enough money, and confidence of their investment abilities, will try to get licensed to manage monies legitimately. Those without sufficient money or confidence of their ability may go into areas that does not require licensing, such as 'education.'

I have been critical of purveyors of 'investment education' for many reasons. But mainly it is simply a case of a product/service that is sold at an overvalued price. Or in other words, having to pay much more than what one could possibly receive.

But I have also realised that there will always be a market for 'investment education.' Mainly because there will always be people who are willing to pay for what some of them may believe to be hot tips. Yes, most of such attendees are not looking to be actually educated, than to be told what to buy and not to buy. No, these attendees are not of the uneducated sort. They knew there is a possibility their money will not be well-spent. They just choose to believe that their 'trainers' are people who are going to help them identify the next multi-bagger. There is little sense in trying to do 'public service,' to warn people of such potential pitfalls, so to speak.

The beauty of some of these 'investment education' companies is that they not only 'teach' you, but also sell you investment products. I have to say, they are truly entrepreneurial; a cut far above their 'investment education' competitors. If the investments they sold to their students have continued to perform well, they could eventually have gain a license to sell their fund to not only AI, but retailers. That could have been a game-changer for them.

It is highly unlikely that the 'investment education' industry will come under regulation. It is, after all, a case of willing-buyer meets willing-seller, and no guarantees of outcome, whatever it may be.

Instead, perhaps MAS should relax the rules regulating fund management. Perhaps allowing non-AI investors to put their money in the smaller hedge funds, who are now not allowed to sell to non-AI investors. And perhaps lowering the requirements for an aspiring fund manager. After all, if you're as good as you claim to be -- at least good enough to be teaching other how to do it -- should you not also be good enough to be doing it professionally, and hence be judged by professional standards?

[dreamybear]

8i operation explained that
 The real danger for course students is not losing a 1 time couple of thousands on instructors.

But the later move where the student place their faith and life long saving money into an instructor is always ready to pump up their garbage and dump it to their hidden champion fund.

And the student pick up the garbage like a gem.

So goes the share from $1 to $0.06.
95% wipe out for student who practice value investing.

Given that many students know each other since they attended the course as a class, wld it be easier for them if they were to collectively approach the instructor for accountability ?

But I noticed there are actually more people investing in 8i, no. of shareholders : 670(AR2016) vs 923(AR2019).

For students who are directly invested into 8i, I guess they can clarify their issues with mgmt during the AGM. I wld think being educated in value investing, the students shd be able to ask sensible & relevant questions.

On a side note, it is actually quite fascinating that the founders were able to build & grow an investment education provider to being listed in a stock exchange, way before the current fintech craze.

In fact, I think most of founders are already financial independent :
- 2 major shareholders earn abt $200-300k per annum
- Pauline(Value Investing College) : ".....Since I began building my assets in 2010, I've successfully created a 7-figure portfolio of rock-solid share picks! ...."
Ref : https://valueinvestingcollege.clickfunne...urce=Prime

Digressing, compared to investment education, fund managemnt involves much more hassle, e.g. regulation, audit, manpower to constantly monitor the investment, performance uncertainity, etc. Hence, I think, relatively, investor education is a much better business.